Brightcove Inc. (BCOV) reported a loss of 11 cents per share in the first quarter of 2013, wider than the Zacks Consensus Estimate of a loss of 9 cents. However, loss per share was narrower than a loss of 23 cents reported in the year-ago quarter.

Revenues

Revenues jumped 24.0% from the year-ago quarter to $24.7 million, slightly better than the consensus mark. The year-over-year increase was primarily driven by a 26.2% surge in Subscription and Support revenues, which fully offset a 14.8% plunge in Professional Services and Other revenues.

Brighcove’s revenues from premium offerings jumped 22.0% year over year to $22.2 million. Premium refers to Brighcove’s traditional video cloud customers, the enterprise edition of app cloud and Zencoder customers on annual contracts. Revenues from volume offerings surged 45.0% year over year to $2.5 million.

Revenues from non-media customers (63% of total revenue) grew 31.0% year over year, while revenues from media customers (37% of total revenue) increased 13% from the year-ago quarter. Recurring dollar retention rate was 97% in the first quarter.

Region wise, revenues from North America (62% of total revenue) increased 18.0% year over year to $15.4 million. Europe (22% of total revenue) jumped 22.0% year over year to $5.4 million. Asia-Pacific including Japan (16% of total revenue) soared 57.0% from the year-ago quarter to $3.9 million.

Operating expenses soared 16.7% year over year to $19.6 million due to a 21.2% year-over-year increase in research & development expenses, 10.4% year-on-year rise in sales & marketing expenses and a 27.2% jump in general & administrative expenses.

Loss from operations (including stock-based compensation) was $2.9 million, narrower than $3.2 million reported in the year-ago quarter on a higher revenue base.

Net loss (including stock based compensation) of $3.2 million was narrower than a loss of $3.6 million incurred in the prior-year quarter.

Balance Sheet and Cash Flow

Exiting the first quarter, Brightcove had cash, cash equivalents and investments of $26.9 million, down from $30.0 million reported in the fourth quarter. Brightcove’s cash outflow was $2.8 million in the first quarter. Free cash outflow was $2.9 million in the quarter.

Outlook

For the second quarter, Brightcove expects revenues in the range of $25.7 million to $26.2 million. Non-GAAP operating loss is expected to be $1.4 million to $1.7 million. Non-GAAP loss is expected in the range of 6 cents to 7 cents per share.

For fiscal 2013, Brightcove expects revenues to be in the range of $104.0 million to $106.0 million. Non-GAAP loss is expected to be $3.3 million to $4.8 million. Non-GAAP net loss per share is expected in the range of 15 cents to 22 cents per share.

Recommendation

We believe that strong demand for cloud-based solutions, security and mobile products, and online videos along with strategic acquisitions are the positives for the stock over the long term. However, intense competition and sluggish macro-economic environment are the near-term headwinds.